Directors and officers face new liability under draft
legislation introduced to Parliament.
The key changes for directors and officers proposed in the draft
liability for losses resulting from their unreasonable
behaviour, acts in bad faith or failure to take appropriate action,
with a prescribed list of the circumstances in which liability may
liability for CEOs acting unreasonably or in bad faith when
exercising rights and carrying out duties, with the onus on them to
show that their actions were no unreasonable or in bad faith
a prescribed list of persons to whom directors and officers may
be liable for unreasonable behaviour, acting in bad faith or
failing to act, including liability to the company, liability along
with the company to holders of its shares and other securities and
(in certain cases) liability to other people as well
a new legal basis for directors' and officers'
liability insurance (classifying it as contractual liability
insurance under Article 932 of the Civil Code, and amending the
laws "On Joint-Stock Companies" and "On Limited
Liability Companies" so that they permit this type of
a requirement for the material terms of a D&O liability
insurance contract to be approved by shareholders in general
meeting at the request of the company's board of directors.
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